The Senate voted today to approve the Farm Bill, which includes a measure to reauthorize the Commodity Futures Trading Commission (CFTC) and Senate provisions to extend federal oversight in the energy markets. The bill passed through the House of Representatives Wednesday, and today’s 81-19 “yes” vote by the Senate has the more than two-thirds majority required to override an expected veto by President Bush. If Bush vetoes the bill, it must return again to Congress for a possible override. The CFTC was last reauthorized with the enactment of the Commodity Futures Modernization Act in 2000.
The bill would also clarify CFTC authority on transactions in foreign currency to reduce fraud, strengthen qualifications and minimum capital requirements for Futures Commission Merchants and retail foreign exchange dealers, extend the CFTC’s principles-based oversight to exempt commercial markets that trade significant price contracts and require the CFTC to monitor ECM trading of oil, natural gas, and other commodities for contracts that perform a significant price discovery function.
The bill’s additional provisions on energy regulation by Senators Dianne Feinstein (D-Calif.) Carl Levin (D-Mich.) and Olympia Snowe (R-Maine) would increase transparency, create an audit trail, impose speculation limits, increase financial penalties for market manipulation and excessive speculation in the energy markets and call for more government control in global energy markets. “This bill puts all significant energy trades on electronic platforms within the regulatory confines of the CFTC and will impose limits on the size of trader’s positions to prevent excessive speculation,” Feinstein said in a statement.
